 "Astral's Flowguard pipes and fittings")
Shares of Astral Poly Technik were trading 4 per cent higher at Rs 1,211 on the BSE on Monday after the company reported 220 basis points improvement in Ebitda (earnings before interest, taxes, depreciation, and amortisation) margins at 21.02 per cent in the September quarter (Q2FY21), led by various cost optimisation measures.
The company’s sales during the quarter grew 10 per cent year-on-year (YoY) at Rs 747 crore, on the back of healthy 29 per cent YoY growth in adhesives business at Rs 190 crore. Profit after tax was up 6.6 per cent YoY to Rs 88 crore, supported by better margin and saving in interest costs.
The management said the recovery in pipe segments has picked up momentum from September 2020 onwards. The adhesives business is also doing better from July 2020 and further picked up from October 2020, it said.
The company has plans for expansion and has acquired adjacent land at most of their plants for expansion purposes. To have a pan India presence they acquired a land in East India. In FY21, they will not be heavily spending on branding activities. Analysts at Dolat Capital believe that these are investment phases and Astra will reap long term benefits of these strategies for prolonged periods atleast for the next 5 years.
“With new product addition in the Adhesive segment as well as pipe segment, we feel that revenue growth along with margin profile should get better once the economy is fully recovered. However, with high growth trajectory and expansion activities in place, valuations will remains expensive,” the brokerage firm said in result update.
“We believe Astral has reported a healthy performance during Q2FY21 with improved margin. The product being largely urban centric and linked to construction activities, the company has witnessed postponement of demand led by pandemic and regional lockdowns. The demand pickup started from September 2020 onwards. We believe pick up in constriction activities would help further pick-up in sales for both the segment from H2FY21E onwards,” ICICI Securities said in a note.
The company’s sales during the quarter grew 10 per cent year-on-year (YoY) at Rs 747 crore, on the back of healthy 29 per cent YoY growth in adhesives business at Rs 190 crore. Profit after tax was up 6.6 per cent YoY to Rs 88 crore, supported by better margin and saving in interest costs.
The management said the recovery in pipe segments has picked up momentum from September 2020 onwards. The adhesives business is also doing better from July 2020 and further picked up from October 2020, it said.
The company has plans for expansion and has acquired adjacent land at most of their plants for expansion purposes. To have a pan India presence they acquired a land in East India. In FY21, they will not be heavily spending on branding activities. Analysts at Dolat Capital believe that these are investment phases and Astra will reap long term benefits of these strategies for prolonged periods atleast for the next 5 years.
“With new product addition in the Adhesive segment as well as pipe segment, we feel that revenue growth along with margin profile should get better once the economy is fully recovered. However, with high growth trajectory and expansion activities in place, valuations will remains expensive,” the brokerage firm said in result update.
“We believe Astral has reported a healthy performance during Q2FY21 with improved margin. The product being largely urban centric and linked to construction activities, the company has witnessed postponement of demand led by pandemic and regional lockdowns. The demand pickup started from September 2020 onwards. We believe pick up in constriction activities would help further pick-up in sales for both the segment from H2FY21E onwards,” ICICI Securities said in a note.
